Where to place lowpoly object compared to highpoly object?
Normaly, the lowpoly is in the exact same place as the highpoly object. But if the lowpoly is completely flat, it could be "above" the highpoly. Look at this answer where I project the normals upwards with baking.

Creating game models for android

If your lowpoly object is not flat, you can't move it if you want to bake normals.

If you are willing to bake the lowpoly piece by piece, and each piece is relatively flat you can move details from the highpoly object. Then you must fiddle with the offset parameter and this is usually a pain to get right.